it is 2002 again - the solution

[toughbutfair]

I'm not sure on the exact year - but you'll get the drift.

Lets say our projected tax Revenue in 2010 is the same in absolute terms in 2002, or if you factor in inflation the year 2000.

Why not just revert the expenditure to then. The salary of everybody in the public sector, the amount of children per teacher, the dole and pension, the amount of people working in the health service.

If our income is the same as 2000 ( as adjusted for inflation) then we should pay people what they got in 2000 (as adjusted for inflation)

We got by fine then so we can now.

[H.R. Haldeman]

A pretty good idea which I think will probably happen naturally anyway. But certainly it would be a lot cleaner and more sensible to do it overnight rather than drawing it out for bloody years.

[SPN]

I'm not sure on the exact year - but you'll get the drift.

Lets say our projected tax Revenue in 2010 is the same in absolute terms in 2002, or if you factor in inflation the year 2000.

Why not just revert the expenditure to then. The salary of everybody in the public sector, the amount of children per teacher, the dole and pension, the amount of people working in the health service.

If our income is the same as 2000 ( as adjusted for inflation) then we should pay people what they got in 2000 (as adjusted for inflation)

We got by fine then so we can now.

Yeah, but that was before every Tom, Dick and Harriet lost all sense of reality and got borrowed up to the boIIix to buy new cars, new flatscreen TVs, new mobiles, three foreign holidays a year, and - lest we forget - the vastly overpriced house.

If we cut back their salaries (and taxpayer funded, defined benefit pensions) how are they going to meet their repayment schedules?


What we really need is a couple of years of double digit inflation. Gets rid of the debt problem, and allows the government to put pubic service wage rates back at realistic levels.

[bprob]

a tidal wave of "you can't do that because...." is about to hit you tough but fair, but as a jumping off point your idea has a lot of merit.

if you use money saved through the cuts from an bord snip, you can address any 2002 cost targets which aren't quite achievable currently, such as drug and medical devices costs

[toughbutfair]

I thought about the mortgage issue and just forgot to put into the original post.

House prices would drop down towards the prices they were then, so no affordibility issue for those not yet in the market. The rest of us would be in negative equity but if you are not moving house it wouldnt matter - those moving up the ladder would be better off as the more expensive house drops more in real terms. Thanfully interest rates are a record low and much lower than the Irish rates (pre ECB) were in 2000, I know my sisters mortgage in 1998 was 8.5% but not sure on the rate in 2000.

The system may need tweaking but the concept as a whole makes sense.

[SPN]

I thought about the mortgage issue and just forgot to put into the original post.

House prices would drop down towards the prices they were then, so no affordibility issue for those not yet in the market. The rest of us would be in negative equity but if you are not moving house it wouldnt matter - those moving up the ladder would be better off as the more expensive house drops more in real terms. Thanfully interest rates are a record low and much lower than the Irish rates (pre ECB) were in 2000, I know my sisters mortgage in 1998 was 8.5% but not sure on the rate in 2000.

The system may need tweaking but the concept as a whole makes sense.

Nope.

The teachers and Gardai with the €300k mortgages will still have to repay €300k even after we reduce their wages (and after the value of their houses drops to €100k), and I'm pretty sure we'll have 8.5% interest rates within a couple of years.

[toughbutfair]

we can have a rethink when interest rates hit those levels again. They can go on interest only mortgages for a few years until the economy gets stronger. I know my parents initially had a 15 year mortgage but in tough times extended it until it got to be about 27 years.

[toughbutfair]

and I'm pretty sure we'll have 8.5% interest rates within a couple of years.

How come? do you think the european economy will get better or just that inflation will rise (and why would it?)

[BodyofEvidence]

As SPN says, fine apart from the ole nominal household debt levels.....

[SPN]

How come? do you think the european economy will get better or just that inflation will rise (and why would it?)

The only way to get out of the hole we are in is to inflate away the debt. The quicker we devalue the currency, the quicker we get back to normality.